Eade v Chief Executive, Department of Lands [1996] QLC 118

LAND COURT MOSSMAN 9 SEPTEMBER 1996 Re: Appeal against Annual Valuation Valuation of Land Act 1944 Shire of Douglas (AV95-384) Leslie G and Diane Eade v. Chief Executive, Department of Lands (Hearing at Mossman) REASONS FOR DECISION This is an appeal by Mr and Mrs Eade against the valuation of their property situated in Port Douglas Road on the outskirts of Port Douglas. The property is described as Lot 1 on RP 729062, Parish of Salisbury, County of Solander, containing an area of 1222 m². As at 1 January 1995 the respondent under the provisions of s.37(3) of the Valuation of Land Act 1944 valued that land at $126,000. Mr and Mrs Eade first objected against that valuation and then as a result of the disallowance of that objection appealed to the Land Court against the respondent's decision upon objection, advising that their estimate of the unimproved value is $100,000. They based their appeal on grounds that: first, “land zoned for business use must be, by its very nature, allowing for the generation of income be worth more per square metre than that zoned for residential and used for that purpose”, and second, “A land value increase of over 100% in two years is not only unrealistic but unreasonable, but when taken in relation to the adjoining property zoned “Resort Business”, and used as such, of similar size, this suggests a total lack of realism on the part of the Lands Valuation Department”. The grounds then state that No. 360 Port Douglas Road, (the subject land), was valued 1993/1994 at $62,000, and in 1995/1996 at $126,000 as for residential purposes, while the next-door property, No. 362 Port Douglas Road was valued in 1995/1996 at $116,000, used for resort business/shops. Mr Eade appeared and gave evidence on behalf of the appellants. Basically his statement was to the effect that the valuation system supposedly takes no account of the improvements on the land, but does take into account what the future development of [1996] QLC 118 -- 1 of 5 -- 2 that land may be. He pointed out that the valuation of the next door property was zoned for a higher use and yet, being only 34 m² less than the subject land, was valued significantly lower and he thought that far from being valued less than the subject land it should be valued higher. He was of the opinion that the appellants’ valuation estimate of $100,000 was more realistic. Mr Eade also contended that the main purpose of a land valuation system was to distribute the taxing burden in an equitable manner. There seemed to him to be little equity in valuing land on the unrealistic sale price of a parcel of land situated around the corner from the subject land, a sale which might have been highly speculative. Furthermore, Mr Eade contended that the valuation failed to take into account the reduced value of residential blocks on a busy road and other disadvantages. He said that when they purchased the property in September 1993 the valuation was $62,000. It had now increased to over double that figure, to $126,000. At the hearing Mr Goodman-Jones appeared on behalf of the respondent and evidence for the respondent was given by Mr Kevin Allan, Senior Valuer in the employ of the Department of Natural Resources. Mr Kevin Allan tendered a statement showing how the subject land had been valued. His valuation was based on the sale of a single property situated in Andrews Close, which sold in March 1994 for $113,500, analysed to show an unimproved value of $112,500 and to which an unimproved value at the relevant date of $111,000 had been applied. Mr Allan's report described that property being situated in a cul-de-sac, slightly closer to the Port Douglas centre. Overall he considered the sale to be inferior, due to the subject land's much larger area. Mr Allan described the subject land as comprising a level to easy sloping inside lot, falling gently to the east. Lot 9 on RP 739139 which is a drainage property at the rear, which is vested in the Douglas Shire Council comprises an open drain which runs along the eastern boundary of the lot. The zoning of the subject land is “Residential”, but under a Development Control Plan the subject property is designated Medium Density, which means that it has possible potential in the future, with consent, for development for units. However, that aspect was not taken into account in making his valuation, because Mr Allan explained that the land had been valued under s.17(1) of the Valuation of Land Act as a single unit residential site. -- 2 of 5 -- 3 Mr Eade contested the use of the sale as a proper comparison with the subject land. He thought the property was superior to his land. The sale was situated in a quiet cul-de-sac, without the problems associated with dust and noise from a busy road and a service road, which runs past the subject land. It is the access route for traffic to the shopping centre situated on the corner of Port Douglas Road and Barrier Street. Mr Eade raised other matters in relation to the valuation, particularly the sale of a property at the corner of Atoll Close and Port Douglas Road, which had been discussed at an objection conference. I do not propose to go into that matter, because the details of that sale were discussed at a without prejudice objection conference and should not be taken into account in this appeal. No other sales were advanced. Mr Allan described sales situated in Solander which sold at prices which ranged from $100,000 up to $150,000. They were zoned “Residential” and comprised allotments of 900 m² and larger. There was also some evidence of sales at Four Mile Beach, but I was given no specific details of any of those sales and they play no part in my determination. Under the provisions of the Valuation of Land Act 1944, the respondent Chief Executive is required to value each parcel of land as if the improvements on the land had not been made. That means that the land must be considered as if it was unimproved, but that all the neighbouring properties and all the facilities we as they were at the date of valuation. It has been said that the land must be viewed as if development had passed it by for some reason. Mr Eade has contended that it is inappropriate to adopt the method of valuing the subject land on the basis of the sale of a property that may have been sold at an unrealistic price. This method, he said, is not equitable. One can understand Mr Eade's contention, but the law is clear that the subject land must be valued at its unimproved market value. Decisions of the Land Appeal Court are to the effect that the best method of determining unimproved value is to have regard to sales of unimproved or lightly improved land. In Clough v. The Valuer-General (1981-1982) QLCR 70 at p.76 the Land Appeal Court said this, "It has been traditionally laid down many times and in many jurisdictions in ascertaining unimproved value sales of unimproved land of -- 3 of 5 -- 4 comparable quality, situation etc. to the subject land if they are available are to be preferred as the best guide for arriving at unimproved value." More recently the Land Appeal Court in Grahn v. Chief Executive (1992-1993) 14 QLCR 327, has gone further and discussed the use of sales evidence, even though such sales may not be ideal, as being preferable to basing a valuation on relativity with other valuations In this case Mr Eade has attempted to raise the valuation applied to the land next door to the subject land being Lot 1 on RP 745094. That land, I am told, is zoned for a higher purpose, being “Resort Business”. It is, however, developed with a single unit dwelling-house and Mr Allan had valued that land under the concessional provisions of s.17(1) of the Act, as if it was a single unit dwelling-house site. The relevant provision of the Act provides that in valuing land which is being exclusively used for purposes of a single dwelling-house, any potential that the land may have for any other purpose is to be disregarded. “Single dwelling-house” is defined in that section. However, Mr Eade contended that the land is not exclusively used for the purpose of a single dwelling-house, and therefore any concession should not apply. He said that the land should be valued at its highest and best use, which it is agreed by both parties would be considerably higher than residential. Mr Allan said that when he inspected the land and made inquiries, he ascertained that it was used only for purposes of a single dwelling-house. If it was not so used then he was unaware of that. I accept Mr Allan's statement. However, it does not matter whether the valuation of the adjoining land is correct or not. As Mr Goodman-Jones, advocate for the Department has pointed out, the matter presently before the Court is the correctness of valuation of the subject land, rather than the valuation of any other land. As the Land Appeal Court confirmed in Grahn’s case, it is essential to value the land subject of the appeal correctly than to value it in accordance with other land which is incorrectly valued, and thus ensure uniform error. The valuation which is before me for consideration today is that of the subject land and not the correctness of the valuation of the adjoining land. If what Mr Eade said is correct about the use of the adjoining land, then it may well be that it does not qualify to a concessional valuation as land exclusively used for purposes of a -- 4 of 5 -- 5 single dwelling-house. However, that is a matter for the Chief Executive and not a matter for me. That case is not before me today and therefore I can make no determination about its value. In the event having weighed all the evidence, I have come to the conclusion that as Mr and Mrs Eade are bound by the grounds of their appeal and they have not proved their grounds of appeal, their appeal must fail. In my view while one can have sympathy with the owner’s concern about the increase in unimproved values that have been applied in Port Douglas over the relevant period, Mr and Mrs Eade have simply not discharged the onus of proving their grounds of appeal They have not discharged the onus of proving that the Chief Executive's valuation is incorrect. Therefore, I have no alternative but to dismiss the appeal and to find that the unimproved value of the subject land as determined by the Chief Executive at $126,000 is affirmed. JJ TRICKETT PRESIDENT OF THE LAND COURT -- 5 of 5 --